What You Need to Know About Loan Contingency Removal
Filed under: Finances
Any time we are writing an offer for California real estate, there is an automatic clause for a 17-day contingency removal. As a home buyer, do you know what this means and how it could affect your transaction? Here are a few things that you should keep in mind.
How a Loan Contingency Removal Works
When there is a loan contingency removal, it means that the home buyer has 17 days to inspect and appraise the home to ensure that they will qualify for the loan. The deposit is on hold during this time, and the seller doesn’t receive this deposit until the buyer does their “due diligence.”
If there are any issues with the property, then further negotiations can happen. For example, if problems are discovered, then the buyer might ask the seller to cover the cost of repairs.
Releasing the Contingency Deposit
The deposit is released to the seller after two criteria are met:
- The 17-day contingency period is over
- The buyer must sign a document authorizing the deposit to go to the seller
When both of these requirements have been met, then the escrow service will release the funds to the seller. Both buyers and sellers need to pay attention to this time frame so that the deposit is released on schedule. Giving the buyer 17 days for due diligence ensures that the buyer is protected against the unknown before moving forward with the purchase.
Expert Real Estate Services in Temecula
Do you need help navigating the process of buying or selling a home? Then reach out to my expert team for personalized recommendations and full support every step of the way. I’m always happy to answer your questions and provide the assistance that you need from a real estate team that you can trust. Call, text, or email to discuss your options: (951) 473-0390 or [email protected].